A Dutch city is giving money away to test the basic income theory • Hacker News Board

Re: A Dutch city is giving money away to test the basic income theory

#501

Post by roblev » Thu, Jul 02, 2015, 10:39 PM UTC

branchless wrote: post #467

[deleted] wrote: post #459

Earlier quoted context omitted.

[deleted]

Oh dear. BoE in their blog have a different idea to you, from their official blog: http://bankunderground.co.uk/2015/06/30/banks-are-not-interm... > In the simple ILF model, bank loans represent the intermediation of real savings, or loanable funds, between non-bank savers and non-bank borrowers. Lending starts with banks collecting deposits of real resources from one agent, and ends with the lending of those resourc…

A lot of the confusion comes from the fact that there are two sorts of money that are in circulation: base money and bank money. This blog post is only talking about bank money, and does not reference base money.

Base money (dollar bills, Euro notes, pound notes etc.) is controlled entirely by the central bank and base money can be created and destroyed by the central bank, whenever they like. Think of it as like digging some more gold or creating some more bitcoins.

Bank money is created by people either depositing base money with a bank, or indeed by a bank issuing a loan as described in the blog post. A deposit can be seen as a loan to the bank: all deposits are loans, all loans are deposits when looked at from the other PoV. Anyway, bank money has similar characteristics to base money - it can be used by purchase goods, it stores value etc.

I can buy a book with base money, by handing the merchant a few dollar bills. Or I can buy the book with bank money, by handing my bank card to the merchant and after some settlement magic my bank will stop owing me some money and will instead owe it to the merchant. The IOU is the bank money, it is a claim on base money that was previously deposited. Base money and bank money act similarly from my PoV, they are both denominated in dollars (or Euros or pounds or...) and they are normally interchangeable at a 1:1 rate. Sometimes they are not.. e.g. if my bank was nearly going bankrupt with no deposit insurance, I might be happy to get my base money back at 80 cents on the dollar from my bank money. Bank money has credit risk of the bank, base money has no counterparty risk.

Banks do need to have reserves of base money relative to the amount of bank money they are allowed to create; this is called Capital Adequacy and is a primary restraint on bank money creation. A bank has a limited amount of capital (its own real base money that is not owed to anyone else) and it cannot easily create more capital. If a bank is lending out too much to borrowers, then its Capital Adequacy Ratio will get out of line and it will have to stop lending.

Re: A Dutch city is giving money away to test the basic income theory

#502

Post by undersuit » Thu, Jul 02, 2015, 10:45 PM UTC

vaaaauughn wrote: post #465

cmdkeen wrote: post #379

Earlier quoted context omitted.

What incentive do they have to educate themselves? After all they currently had an incentive to educate themselves during their period of compulsory education yet still ended up working in a minimum wage job they value so little they'd quit if they were given a minimum wage. You don't see masses of low waged workers in countries with maximum working hours (and thus some leisure time) educating themselves.

You seem to assume that every school gives an equally good education and accommodates all students' individual strengths and difficulties perfectly. In some parts of the world, like the US, better school districts are correlated to areas with higher property tax revenue.

In the US better school districts are inversely correlated with poverty rates.

http://nasspblogs.org/principaldifference/2014/02/pisa-its-s...

Re: A Dutch city is giving money away to test the basic income theory

#503

Post by reb » Thu, Jul 02, 2015, 10:46 PM UTC

ryanx435 wrote: post #493

reb wrote: post #492

Earlier quoted context omitted.

>Once they have every single person who breathes on the dole, this will give them unbelievable leverage against the people. That may not be a bad thing if we're talking about people who contribute nil to society. >If the government is giving everyone a check, how hard is it to argue that the check should be more? Not hard. Not hard to argue, very hard to accomplish. Political change in many countries is slow and welf…

> The exciting thing is that it gets the useless and/or uncommitted to self-select out of the labor market. That means better productivity, higher quality services, a better work environment, lower labor supply and higher wages. you're going to have to explain this logical leap as it is non intuitive and I don't see any sources on your comment.

Simple enough: clearing the lazy, the unmotivated, and the unaccountable from our labor market would make it easier to get work done (less drain from employees who don't contribute); make work more pleasant (surrounded by motivated colleagues who value what they do); and eliminate competition from useless employees who leech jobs, artificially inflate the labor supply and tarnish average applicant quality because they'd rather stay home and do nothing (improving employees' position relative to employers).

The above doesn't seem non intuitive to me, beyond the idea that it might actually be worth it to pay some people to go away.

Re: A Dutch city is giving money away to test the basic income theory

#504

Post by ghthor » Thu, Jul 02, 2015, 10:52 PM UTC

pjlegato wrote: post #400

uhwhat wrote: post #225

Earlier quoted context omitted.

I imagine partitioning living NEEDS [housing, food, transportation] as an area of the economy with its own money/token/basic-income-credits system separate from the WANT economy of everything else.

The problem is the intractable dispute about what things should go into which category. Empirically, there has been a strong historical tendency to move things into the "NEED" category that were traditionally in the "WANT" category. For example, indoor plumbing was considered a grossly extravagant luxury for almost all of human history. Within the last hundred years, the richer societies have made laws (building code…

What if items from the WANT category are moved to the NEED category when either 1 of 2 things are met. It's empirically shown to improve the health of the owners. Or it's possible to create the item for everyone on earth, meaning we have the resources/manufacturing without harming the biosphere.

With these 2 rules we should see a steady increase in QoL for everyone.

The main problem with the whole idea is that it is inevitable that an exchange rate will be set and they will be traded. What does a NEED collector do with the collected NEED currency?

Re: A Dutch city is giving money away to test the basic income theory

#505

Post by ItsDeathball » Thu, Jul 02, 2015, 10:59 PM UTC

err4nt wrote: post #432

fchollet wrote: post #422

Earlier quoted context omitted.

When people don't have to pick their housing based on the location of low-wage jobs (dense cities), I would expect the rent to go down due to better utilization of the total housing supply.

I don't think that's how rent is set right now. I believe people charge rent based on what people can bear to pay - so as long as another person with BI comes along willing to pay the higher rent, the landlord will sell to him instead!

It's not the house that's valuable to a renter, though. Most of the price variation for a given floor space comes from location-driven land cost. If someone on basic income plans to live solely on their BI for a bit, maybe to work on a personal project, maybe just to play videogames, they won't be location-bound and can seek cheaper housing in the suburbs or a rural area. There is a lot of underutilized land in America that could become very attractive to developers if the pool of available consumers suddenly included a subgroup that didn't care about commute time. That's not just greenfield developments, either; it would also apply to major cities, like in the Rust Belt, where housing and land are incredibly cheap because there are no jobs available.

Re: A Dutch city is giving money away to test the basic income theory

#506

Post by exch » Thu, Jul 02, 2015, 10:59 PM UTC

JoeAltmaier wrote: post #323

TeMPOraL wrote: post #322

Earlier quoted context omitted.

From what I heard, in very poor countries children are often treated as investment. A child can start paying itself off by working as soon as even 5 years after being born. As a parent, you want someone to take care of you when you're old, and given high children mortality, you're better off making more of them in hope at least one survives to adulthood. Basically, those people are too poor to afford not having many…

This is rapidly becoming ancient history. There's a wonderful youtube video showing all the countries on earth, moving on a multimensional chart by infant mortality and standard of living. The origin is ideal. All countries but 1 or two have shot like arrows toward the origin over the last century.

This talk by Hans Rosling may be what you are referring to.

https://www.youtube.com/watch?v=dymPP9RhPjw

Re: A Dutch city is giving money away to test the basic income theory

#507

Post by thuuuomas » Thu, Jul 02, 2015, 11:00 PM UTC

JustSomeNobody wrote: post #381

TisButMe wrote: post #44

Earlier quoted context omitted.

But those people will always be a net negative for society, basic income or not. Empowering those who would make a positive difference if they had enough time/money sounds like a good idea to me.

I think those who are against a basic wage feel the current net negative portion of society would be a greater net negative because not only would they be receiving a wage, but they'd spend it on crap and society would still have to take care of them (hospital bills, food, etc).

> but they'd spend it on crap

Sounds like a good deal for the crap vendors. Also, maybe the instant-gratification app scene...

Re: A Dutch city is giving money away to test the basic income theory

#508

Post by ZenoArrow » Thu, Jul 02, 2015, 11:20 PM UTC

FHorse wrote: post #390

vfdva wrote: post #255

Earlier quoted context omitted.

What was it about living in NYC ghettos that suggests basic income is a bad idea?

Witnessed the total lack of motivation of people to do anything for themselves. It was the result of the policy at the time. When the policy changed, the behavior also changed. BMI provides no incentives for people to do the right thing, which is to work hard to better themselves. Quite the opposite. By removing any requirements, it enables unmotivated people to just sit on their ass. Nor does it discourage antisocia…

What about making higher education free, do you see benefits in doing that?

Re: A Dutch city is giving money away to test the basic income theory

#509

Post by ryanx435 » Thu, Jul 02, 2015, 11:24 PM UTC

reb wrote: post #503

ryanx435 wrote: post #493

Earlier quoted context omitted.

> The exciting thing is that it gets the useless and/or uncommitted to self-select out of the labor market. That means better productivity, higher quality services, a better work environment, lower labor supply and higher wages. you're going to have to explain this logical leap as it is non intuitive and I don't see any sources on your comment.

Simple enough: clearing the lazy, the unmotivated, and the unaccountable from our labor market would make it easier to get work done (less drain from employees who don't contribute); make work more pleasant (surrounded by motivated colleagues who value what they do); and eliminate competition from useless employees who leech jobs, artificially inflate the labor supply and tarnish average applicant quality because the…

all of the problems you just described can be solved by simply firing a bad employee or not hiring bad ones in the first place.

I'm still not following why paying them to do nothing is necessary.

Re: A Dutch city is giving money away to test the basic income theory

#510

Post by reb » Thu, Jul 02, 2015, 11:52 PM UTC

ryanx435 wrote: post #509

reb wrote: post #503

Earlier quoted context omitted.

Simple enough: clearing the lazy, the unmotivated, and the unaccountable from our labor market would make it easier to get work done (less drain from employees who don't contribute); make work more pleasant (surrounded by motivated colleagues who value what they do); and eliminate competition from useless employees who leech jobs, artificially inflate the labor supply and tarnish average applicant quality because the…

all of the problems you just described can be solved by simply firing a bad employee or not hiring bad ones in the first place. I'm still not following why paying them to do nothing is necessary.

>all of the problems you just described can be solved by simply firing a bad employee or not hiring bad ones in the first place.

Hardly. If hiring and firing could effectively eliminate poor employees, there wouldn't be so many. As it is, only the most egregious are weeded out. Firing costly employees can be exceptionally difficult depending on local regulations and may not even be worth the trouble considering the risk of simply finding another costly employee. In a world where you more or less must work, low-quality job applicants are especially incentivized to misrepresent themselves. Basic income would divert many of these people out of the workforce and into their homes where they can do less damage.

>I'm still not following why paying them to do nothing is necessary.

They're already being payed to do nothing. They're just doing nothing at work where it costs businesses money, hurts the experience for customers/clients, and worsens the workplace for employees who really care about what they do. And at work they do worse than nothing: not only are they paid to do nothing, but they fill a position that could be filled by a productive employee. So while the business loses money on the employee, the whole machine is simultaneously thrown off balance by a missing cog. Usually fellow coworkers wind up compensating (paying) for this imbalance, with no extra reward. Best case scenario, the business manages to fire the employee. Then the individual either moves on to pilfer another company or goes on welfare. They don't just fall out of the system, they continue racking up costs while contributing nothing. Basic income would allow us to filter them out cheaply (letting low-quality "workers" opt-out instead of making businesses review, employ, and reject them) and fix their monthly cost relative to our economy. Meanwhile, our businesses would become leaner and more effective.

You can't eliminate leeches from society, but you can minimize their economic impact. It is less costly to pay them to stay home than to pay them to come to work where their costs are multiplied.